Chinese electric vehicle startup Xpeng Motors has managed to raise around $500 million after the completion of its latest funding round. The injection of new capital comes amid the increasing competition in China's new energy vehicle market, particularly from foreign carmakers such as Tesla.
Xpeng Motors announced on Monday that it had signed its latest Series C+ financing round worth around $500 million. Most of the capital injection was from investment groups led by Sequoia Capital China, Hillhouse Capital, Aspex, and Coatue.
The latest funding round follows a $400 million cash injection into the company during its last funding activity back in November. Some of the more notable investors in its last funding round included Chinese smartphone giant Xiaomi.
The Series C+ funding round also comes as the company is starting to deliver the first batch of units of its new P7 fully-electric sedan. The electric vehicle is being marketed as a direct competitor to Tesla's Model 3, which began rolling out of the company's Shanghai Factory back in January. Xpeng's P7 electric sedan boasts a maximum range of 706 kilometers or 440 miles on a single charge. It is being sold in China at a price that starts at 254,900 yuan or roughly around $36,000.
China's much wider car industry was heavily affected by the spread of the coronavirus pandemic. According to the China Association of Automobile Manufacturers, sales in the industry's new energy vehicle sector fell by about 33.1 percent since June. However, figures have been steadily recovering and new energy companies are ramping up their efforts to take advantage of the rebound.
The government's continued rollout of supporting measures and policies have also greatly contributed to the rebound in sales in the new energy vehicle sector. Most of the subsidies and tax breaks that were set to expire this year have already been extended to 2022. China has also announced plans of making substantial investments in enhancing the country's electric charging infrastructure.
The strong government support combined with the more favorable policies has managed to fuel intense competition in the sector, including the emergence of new domestic brands. Apart from Xpeng Motors, other Chinese new energy firms have also accelerated their own efforts to raise capital. Earlier in the month, Li Auto announced that it will be pushing ahead with its planning initial public offering (IPO) in the United States. Meanwhile, Chinese electric carmaker NIO announced that it had managed to secure 10.4 billion yuan in new financing.
